Consider a process consisting of three resources; each resource is staffed by two workers.

Resource #1 has a processing time of 10 minutes per unit.

Resource #2 has a processing time of 8 minutes per unit.

Resource #3 has a processing time of 4 minutes per unit.

Assume each worker gets paid $15 per hour. Each unit is sold for $6 and includes parts that are sourced for $1 which is the variable cost. The company has fixed costs of $10 per hour. Demand rate is assumed as 13 units per hour.

What is the idea cycle time to meet the demand? (25/100)

Which option is the best in terms of the profit per hour? (Calculate the profit of each option to choose the best one.)

Option #1: 10% lower material costs (25/100)

Option #2: 10% lower fixed costs (25/100)

Option #3: 10% faster at bottleneck (25/100)